There is an emerging school of economic thought, Modern Monetary Theory (MMT), that describes: “the workings of modern money systems, where a government responsible for fiscal policy (taxing and spending) is a monopoly currency issuer, issuing a non-commodity-based floating exchange rate currency” To better understand the cause(s) of the financial melt-down of 2007, many prominent economists developed…
Today, May 18th, Dow made a down day, which was the 13th down day in the previous three weeks or 15 days. Since 1970 Dow has had such a losing streak only 24 times (excluding the current one). Out of these, 11 times Dow had a positive day next day and 14 times it went on to record another…
Here is what I am reading this morning: Who is Responsible for the Greek Tragedy? (Project Syndicate) Risk Was Never as Dominant as We Thought (WSJ Blogs) Portuguese Find Oasis from Crisis in Former Colony (Spiegel Online) What Dow Theory says about correction (Market Watch) Why Rupee has been the worst performing currency among emerging…
Emerging markets have been acting as the engine for the global growth for past many years. Their economies are growing in high single digit or double digit in some cases. However, looking at the performance of their stock markets, you wouldn’t be able to make that determination. Here is their performance since Feb ’08. The chart uses country/region specific…
Here is the financial crisis of 2007-2008 timeline mapped on the S&P500 chart. Only major events and announcements leading upto endof Sept ’08 are included. After Sept. ’08, Federal Reserve, US Treasury, IMF and major central banks took a number of steps to quell the storm and stabilize the market. Majority of these steps were taken in…
USD/JPY was in the midst of a potential saucer – or rounding bottom – pattern. However, the mysterious Yen has struck again in the aftermath of the news that ECB is stopping lending to some Greek banks and its President Mario Draghi signaled the ECB won’t compromise on key principles to keep Greece in the euro…
Small cap Russell 200 Index ($RUT) is very precariously positioned. At the moment it is flirting with the neck line break of a potential Head & Shoulder pattern. The left shoulder of the pattern was formed at 833.02 in early Feb and then in mid-Feb – making a double left shoulder. The head of the…
Here is what I am reading: China Stimulus: a Lightbulb Moment (beyondbrics) 7 Things Happen to You When You Are Completely Honest (The Altucher Confidential) Fed Signals Easing Option Amid Europe Risks to Growth (Bloomberg) JPMorgan’s Trading Loss Is Said to Rise at Least 50% (The New York Times) The Mysterious Yen (WSJ Bolgs) It’s Getting…
In recent times, one of the flight-to-safety trade in currency markets has been USD/JPY. When the market uncertainty goes up, JPY goes up against USD. USD made an all time low of 75.57 on October 31, 2011. It again came down to within 50 PIPs of this low in early Feb ’12 before rising up to 84.178…
Every year, PIMCO organizes a forum, which brings together top people from its 12 world-wide offices and outside finance and economics thought leaders to debate global financial markets. These investment professionals and thought leaders discuss and identify major trends that will be in play for next three to five years. Outcomes of these forums provide…
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